Citycon Oyj

OMXH:CTY1S

Earnings Call Transcript 2023-Q1

[Sakari Jarvela, executive]

Good morning, everyone, and welcome to Citycon's First Quarter Results Audiocast.

Last night, we published our first quarter 2023 results. All results materials can be found from the Investors section of our website. I'm Sakari Jarvela, heading the Investor Relations at Citycon and I will be hosting the call today. And with me here in the call are, as usual, our CEO, Mr. Scott Ball; and our CFO, Mr. Bret McLeod.

Scott will start the presentations by going through a summary of our business and operational highlights for the first quarter. And following that, Bret will go through our financial results and financial guidance for the full year 2023. After the presentations, there will be a separate Q&A session, so we will be opening the line for questions from the audience.

With that, I will pass on to Scott. Please go ahead.

[F. Ball, executive]

Thanks, Sakari. Good morning, everybody. The first quarter of 2023 provided strong operational results, which were impacted by the translation of both SEK and NOK against the FX rate to euro. The strong operating results included an increase in like-for-like net rental income of 9.4% over the same time last year. This was a result of 6.8% average indexation and bolstered by strong tenant sales and footfall as like-for-like metrics improved 6.2% and 7.6%, respectively. The majority of our leases were indexed at the beginning of the year, however, approximately 10% of our leases were indexed in February, meaning that those rent increases did not fully impact our Q1 rental income.

Our retail occupancy climbed to 95.4% versus 95.1%, while leasing spreads kept pace with indexation. The combination of these factors resulted in an increase in average rent per square meter with comparable FX of EUR 1.6 to EUR 24.4. Our tenants, the majority of whom are grocery, necessity-based and municipal services, benefited from the growth in sales and footfall while providing our portfolio with consistency and stability due to their high credit worthiness.

In comparable FX standing NRI was up 8.7% in Q1 compared to Q1 '22 while direct operating profit improved 7.5% and adjusted EPRA EPS, 9.0% in the first quarter. The decline in NOK and SEK versus the euro, which are at historical lows, negatively impacted our net rental income by EUR 2.4 million. However, the underlying business of our assets remain strong, as evidenced by our operational results and increased asset values during the quarter, resulting in a EUR 44.7 million fair value gain on our investment properties over the prior quarter.

As it relates to the balance sheet, we are very pleased to announce the refinancing and expansion of our credit facility, which was due in June of 2024. This new facility matures in 2026 with the potential to extend it to '27 and has expanded from EUR 500 million to EUR 650 million, consisting of a EUR 400 million revolver and a EUR 250 million term loan, the proceeds of which will be used to continue to address our near-term maturities. The facility is secured by Iso Omena and 4 Norwegian assets at current market valuations and carries attractive terms to provide for continued financial flexibility.

All 5 current Nordic lenders increased their commitments while a sixth international bank was added to further strengthen the banking group. This credit facility expansion is an important milestone for our financing plan and commitment to remain investment grade as it confirms lender understanding of the stability of our business model, provides a transaction record to support current valuations and provides ample liquidity to continue to improve our maturity schedule and balance sheet.

To that end, we continue to remain active in repurchasing debt in the first quarter. As noted in our year-end '22 update, we executed a tender to repurchase a combination of senior and hybrid bonds. In that transaction, we deployed EUR 41.4 million of cash to repurchase EUR 57.4 million of notional bonds. In addition, we continued repurchasing bonds in the open market in the first quarter and repurchased EUR 22.5 million of notional '24 bonds for approximately EUR 21.7 million of cash and a yield of 4%.

Through these actions, we continue to mitigate the impact of higher current market interest rates, while also improving our overall balance sheet.

We were encouraged that the rating agencies took note of our balance sheet activities and S&P reaffirmed our investment-grade credit rating and outlook of BBB- stable in April.

In addition, we continue our efforts on our noncore asset sale target of approximately EUR 380 million, reflecting the EUR 120 million of assets we sold in December of last year, and have confidence that we'll meet that target by the end of 2024, particularly as the debt markets improve for potential buyers and as evidenced by the success of the placement of the term loan we've just announced.

We opened our 3 additional residential towers in Lippulaiva in the first quarter and are pleased with their leasing progress. These residential units are unique in the submarket with direct connection to the metro and create additional demand for the retail property as well as diversify Citycon's revenue streams. I should note that Lippulaiva's net rental income is not yet fully stabilized and will continue to improve.

Subsequent to quarter end, we decided to temporarily close Torvbyen, a very small noncore asset in Norway, as a precautionary measure due to an investigation into the movement of the building. While we do not have the full scope of the remediation plan or timeline for the asset to remain closed, our team is working diligently on the ground to address the issue.

In summary, the first quarter was one of the strongest operationally in the company's history, and the underlying business continues to perform exceptionally well. However, it was impacted this quarter from both the NOK and SEK currencies, which are at historical lows. We saw healthy gains in sales, leasing and NRI and continue to take significant actions to strengthen our balance sheet with the renewed and enlarged credit facility as well as continued bond repurchases.

While macroeconomic uncertainties remain, our strategy of owning necessity-based mixed-use assets with excellent access to transportation in the largest Nordic cities continues to produce solid results. We see no signs of this changing and as a result, we are reaffirming our 2023 guidance.

I will now turn it over to Bret to discuss our financials in more detail.

[Bret McLeod, executive]

Thanks, Scott, and good morning, everyone. As Scott said, in comparable currency, it was a very strong quarter operationally with indexation driving results and like-for-like net rental income increasing 9.4%. Looking at the details of our direct EPRA results for the quarter on Slide 8. In constant currency, net rental income growth was up an impressive 8.7% for the standing portfolio, which excludes dispositions and includes Lippulaiva. We had excellent performance in all our markets with the one exception being Sweden, where indexation increases of 8.7% were offset by several negative onetime items that were expected. For the full year, we anticipate Swedish assets to perform as anticipated.

Speaking of individual countries, you will note that this quarter, we have reorganized our country reporting to separate out our 3 major markets, Finland, Norway and Sweden, while grouping together our assets in Denmark and Estonia. While we recognize this change provides some noise for analysts in Q1, we believe it reflects how we internally analyze and review our business and will provide greater transparency for shareholders on our operations in 2023 and going forward. If you have any questions on this change, of course, please feel free to reach out directly.

Looking to standing direct operating profit, we saw a nice increase of 7.5% in comparable currency. Of note, G&A was slightly higher versus Q1 2022 due to higher bonus payments related to 2022 outperformance. Again, this is specific to Q1, and we anticipate full year G&A to be in line with our guidance for 2023. This strong operational growth flowed nicely to adjusted EPRA earnings and EPS, both of which were up 9% in comparable currency.

As Scott noted, the weak NOK and SEK currencies impacted results in the quarter, including EPRA NRV per share, which would have been EUR 0.61 higher or EUR 11.39. That said, we are very encouraged to see the strength of the underlying properties and the fact that we have been able to pass through the increases in rent and service charges via indexation.

On Slide 9, we provided bridges for both net rental income and EPRA earnings for the total portfolio in the quarter. As mentioned, we saw strong growth of EUR 3.5 million in like-for-like properties, offset by the 4 divested Norwegian assets, resulting in pre-FX growth for all assets of 2.2%. As noted, a weak NOK and SEK negatively impacted NRI by EUR 2.4 million, resulting in total NRI of EUR 47.8 million in Q1 2023.

Looking to the EPRA earnings bridge for the year, inclusive of asset sales, the Q1 loss in total NRI was further impacted by the slight increase in G&A, I previously mentioned as well as a EUR 1.2 million increase in direct financial expenses, mainly a result of the ending of the interest capitalization benefit from our Lippulaiva development, which was complete and open by the end of Q1 2022.

Looking to fair value changes on Slide 10, we saw a positive EUR 44.7 million improvement in net fair values with those improvements in all of our markets as a result of updates to market rent increases due to the actualization of the indexation we've mentioned. Average yield requirements remained stable. These changes to fair value improvements were offset by NOK and SEK weakness, resulting in an EPRA NRV per share of EUR 10.78 versus Q4 2022 of EUR 11.01. As noted, EPRA NRV per share would have been EUR 11.39 in constant currency.

We're very pleased with the refinancing and extension of our credit facility, which increases our liquidity and improves our maturity profile significantly. As noted, the total facility is EUR 650 million, an increase in capacity of EUR 150 million over the prior facility and includes both a EUR 400 million revolver and EUR 250 million term loan. The facility matures in April 2026 and has a 1-year extension option to April 2027. It's secured by 5 assets, Oasen, Linderud, Stovner and Herkules in Norway, and Iso Omena in Finland. Our prior facility was secured by 4 Norwegian assets, so the addition here is Iso Omena.

Importantly, these assets were underwritten at current valuations, providing a significant transaction data point of valuation support for retail assets in both Norway and Finland. The spread adjusts based on our current credit rating, incentivizing improvements in our credit profile. At our current BBB- rating, the spread on the RCF is 215 basis points and 230 basis points on the term loan. At current underlying rates, the term loan carries an interest rate of approximately 5.3%.

The facility is also sustainability linked with the potential for spreads to move plus or minus 5 basis points depending on meeting predefined targets. As an ESG leader, this was an important component for Citycon and underlines our commitment to maintaining a green investment profile. Our 5 current Nordic credit facility lenders are in the banking group, and we have added a sixth international bank, as Scott mentioned. All lenders increased their commitment to Citycon in the new facility, demonstrating our ability to access bank financing, but also emphasizing the strength and stability of our Nordic-focused lenders as well. We're grateful for their partnership and look forward to continuing our longstanding relationship with these institutions.

The success of our credit facility refinancing underlines the true strength, liquidity and flexibility of our balance sheet as noted on Slide 12. Our weighted average interest rate sits at 2.46%, and we have no significant maturities until October of 2024. Post-credit facility execution, we have total available liquidity of EUR 678 million, and over 85% of our assets are unencumbered. We remain committed to maintaining our investment-grade balance sheet and intend to use the term loan proceeds to address our near-term debt maturities. We remain investment grade with both S&P and Moody's with S&P recently reaffirming our BBB- and stable outlook.

As noted on Slide 13, our credit metrics remain stable across the board. I would note that FX impacted IFRS LTV in the quarter, similar to EPRA NRV per share. Excluding the impact of currency changes, our LTV would have been lower by approximately 50 basis points or 42.4% versus the 42.9% we recorded.

Based on the strong operational start to the year, offset by the currency volatility we witnessed in the first quarter, we are reaffirming our full year 2023 guidance of direct operating profit of EUR 174 million to EUR 192 million with a midpoint of EUR 183 million, EPRA EPS of EUR 0.69 to EUR 0.81 with a midpoint of EUR 0.75 and adjusted EPRA EPS of EUR 0.51 to EUR 0.63 with a midpoint of EUR 0.57.

So despite continued currency volatility and macroeconomic concerns, we are confident in the performance of our assets and our ability to drive rents through indexation, the stability of our business and the strength of our necessity-based Nordic-centric strategy.

With that, we are now happy to take your questions.

[Operator]

[Operator Instructions] The next question comes from Anssi Raussi from SEB.

[Anssi Raussi, analyst]

Yes, it's Anssi Raussi from SEB. I have a few questions. And the first one is about your rent hikes. I think your average rent increased by some 7% or so Q-on-Q in a like-for-like basis, but should we expect more rent hikes later this year? Or is the indexation done now?

[F. Ball, executive]

Yes. So we index once a year. As mentioned, approximately 90% of the leases, the indexation occurred in January and then approximately 10% of the leases indexed in February. So there would be no further indexation yet this year. To the extent we continue to relet properties and are able to provide positive leasing spreads, which we've been able to do, you would see rent increases from that. And then next quarter, you would obviously have the full quarter benefit of indexation for the entire portfolio.

[Bret McLeod, executive]

I think the only thing I'd add to that, too, is Estonia is one of the countries where we index later in the quarter. So that's obviously where we've had the higher indexations on. So to Scott's point, you will see the full benefit going forward, but it is coming from one of the markets where we have slightly higher indexations than the average.

[Anssi Raussi, analyst]

Okay. Got it. And you had fair value gains of EUR 45 million. So could you explain the underlying parameters which resulted to these gains?

[Bret McLeod, executive]

Yes. It's really very simply the indexation is, as we've done and continue to do, we update our OpEx and we update our rents every quarter. And then obviously, we get a letter of -- from our independent appraisers about yield changes. So the same process occurred here. As I mentioned, there were no yield changes in the quarter. But when we did update our market rents -- or sorry, our actual rents in our models, that resulted with the increase that we discussed here. So really, it was just a reflection of the indexation running through our models.

[Anssi Raussi, analyst]

Okay, clear. And then about investments and divestments. So you mentioned that you expect to have significantly lower CapEx this year. And you also mentioned that Lippulaiva is pretty much done now. But could you give us some number for this year and also for 2024 about your CapEx estimate?

[Bret McLeod, executive]

We haven't disclosed CapEx in 2024, but for 2023, we've stated I think it's about half of what it was last year. So it's around EUR 80 million is sort of our target for total CapEx. Obviously, that includes finishing the 3 buildings at Lippulaiva that Scott mentioned in the first quarter, but also includes tenant improvements, investments as well in that full number. So that's generally the target for this year. I would expect, again, if we don't do any residential finishing of development, which we don't plan to for 2024. I would expect that number to be lower in 2024 as well.

[F. Ball, executive]

Yes. But I think we're very comfortable that the target that Bret outlined for '23 is where we will end up.

[Anssi Raussi, analyst]

Great. That's clear as well. So what about the divestments? You have something like EUR 380 million left of your program?

[F. Ball, executive]

Yes. So we are in active negotiations on a handful of assets. I would anticipate that we would chip away at that this year as well as next year. If you were to ask me to quantify it, it's probably -- we have EUR 380 million left, so it's probably half this year, half next year. And we're seeing -- it's interesting, we're seeing different levels of activity depending on the country. I would say, in Finland, the market is a little less liquid. And in Norway, the market seems to be fairly liquid with significant investor appetite from institutions outside of the Nordics. So I think it's -- we feel pretty good about it, and we feel pretty good about where we're at in the process with that.

[Anssi Raussi, analyst]

Okay. Good to hear. And the last one from me is about your interest and financing expenses. So should we expect this kind of level in the coming quarters as well what you reported in Q1? Or how should we think about that one? And of course, if we think about 2024, what kind of increase you expect in your financing expenses?

[Bret McLeod, executive]

Look, I would say the guidance we've given for the year reflects the updated credit facility draw that we've done now and obviously assumes that we will repay some of our outstanding debt as well. So there's obviously an increase there. That's reflected in our numbers. Where we can project for 2024, I couldn't speculate on that today. But certainly, I think that what's promising to us is that the mortgage market remains strong, as we've noted here with this transaction on the RCF.

I think we're active as well in other markets to potentially put mortgages in addition to doing the dispositions that Scott has mentioned. And so overall, I think our interest expense reflects our current thoughts on our plan for the rest of the year.

[F. Ball, executive]

Yes. I would second what Bret just said. And I think what Bret and the team accomplished relative to the credit facility and the term loan within that credit facility kind of underlines exactly what Bret is saying as it relates to the mortgage market and our ability to access that. And obviously, is much less expensive than trying to tap the bond market today.

[Operator]

The next question comes from Neeraj Kumar from Barclays.

[Neeraj Kumar, analyst]

Congratulations for the strong results. I just had a couple of questions around the term loan. So is it like a floating rate debt? Or a fixed rate debt?

[Bret McLeod, executive]

It's floating rate, but we can have the option, obviously, to swap a portion of it to fixed, but it is floating rate.

[Neeraj Kumar, analyst]

Okay. So I mean do you plan to keep floating rate exposure? Because if I remember correctly, you had like more or less 100% of your debt fixed earlier, right?

[Bret McLeod, executive]

Yes, correct. Our plan is likely that we will swap probably half of it to fixed, and then we'll let the other float with the cap. So there'll be some protection on it. But obviously some opportunity for upside if interest rates move lower.

[Neeraj Kumar, analyst]

Got it. And my second question on the same is the spread of 230 basis points. Is it sort of linked to rating? I mean what sort of margins can increase or decrease based on 1 notch upgrade or downgrade?

[Bret McLeod, executive]

It is. So at the BBB-, it is -- RCF is 215, as you noted. To go to BBB, it would go to 185.

[Neeraj Kumar, analyst]

And if it was to be downgraded to high yield on the term loan rather than RCF?

[Bret McLeod, executive]

Sure. On the term loan, it would go -- so the term loan would go from [ EUR 232 million ] to BBB, and it would go to [ EUR 290 million ] at BB+.

[Operator]

The next question comes from Ventsi Iliev from Kempen.

[Ventsi Iliev, analyst]

I have a question on the NRI bridge. So if you look at that on Page 9, you report EUR 0.5 million from redevelopment. And as you said, that there is some one-off impact. But if we only look at Finland, I can see in the report that it's EUR 1.4 million, but given that Lippulaiva is -- or at least the retail portion is at 8 -- 95% occupancy, how can this number be that low? Can you please have some color?

[Bret McLeod, executive]

Sure. Well, in redevelopment, it's not just Lippulaiva's. There are other assets that factor into that, right? So in Sweden alone, there's a number of other assets that are categorized as redevelopment. It would be -- I'm just thinking Åkersberga, it's Stenungstorg. There's some other assets as well in Finland, the big one is Myyrmanni. So it's not necessarily development per se, but we're looping all the things where there's other activity going on in that figure.

[Ventsi Iliev, analyst]

Okay. Sorry. Can I have one follow-up question? So in Q1 '22, the Lippulaiva was not yielding and it's fully -- at least the retail portion should be fully yielding now for which I would expect higher annualized trend because if we take the EUR 1.4 million in Finland, the positive EUR 1.4 million and annualize that, it's only EUR 6 million. Can you have something there, please?

[Bret McLeod, executive]

Yes. I'm not sure if I totally follow. I would say one thing, Lippulaiva also opened at the end of Q1 in 2022. So that could have some impact as well. But I'm not sure I totally followed your question, but happy to take it offline with you.

[Operator]

The next question comes from Rob Virdee from Green Street.

[Rubinder Virdee, analyst]

A couple of questions. So number one, just a bigger picture. I see Swedish resi prices are down 30% from peak. I see oil prices down 35% from peak. I'm just wondering how much impact are you seeing from those 2, from the wealth effect on consumers and any changes in behavior that they are having?

[F. Ball, executive]

Yes. I think, Rob, as we look across the countries, Sweden is one where we have seen some pressure on the consumer. I would note that our grocery sales are up rather significantly in the market. Where we're seeing it in our portfolio is perhaps in the restaurant space, which would be kind of the segment of our portfolio that maybe is more discretionary.

As you know, we're not that exposed to fashion, but my understanding is fashion sales are down pretty significantly. And as you know, I think it's a result of in Sweden, the mortgage market is very different than it is in the other countries that we operate in, where almost all mortgages are floating rate. So they're more subject -- the consumer is more subjected to interest rate fluctuation and inflation as it relates to kind of their core cost of how they live.

But it is interesting in our portfolio in Sweden, both traffic and sales are up. So I think we're seeing it kind of more macro. It's interesting, we don't have really any resi exposure in Sweden. But again, just talking to those that are in that business, what we understand is in the sale business, that's a bit more difficult right now, but kind of -- as a result of that, the rental market actually seems to be pretty strong. So again, I don't think there's anything that's like rocket science in there and probably has to be expected.

The flip side of that is we're seeing very, very strong activity in Norway even though, as you say, the oil market is down, and I think that's reflected basically in the currency fluctuation we saw in the first quarter. The consumer is exceptionally strong. And our business -- I mean we saw some eye-popping numbers out of some of our properties.

So I would say that, again, if I were to rank the markets, Norway is kind of clearly at the top. Finland is chugging along just fine. Sweden, the consumer is a bit more challenged, but the segment that we're in, is performing well with maybe the only exposure that we've seen is really on the restaurant side.

[Rubinder Virdee, analyst]

Yes. That's a really useful color. Next question is on the savvy bond purchases that you've done. Just wondering on the hybrids, is there a limit -- I think it's 10% in year 1 and maybe 25% of outstanding by -- over a 10-year period. Can you confirm that's the case? And how much of those repurchases have you already done?

[Bret McLeod, executive]

Sure. So yes, that is generally the case. It's 10%, and then you can wait another year and do another 10%, but it's 25% total on the outstanding amount of the bond, Rob. So to your point, I think we've done -- I don't have the exact number, but it's around EUR 40 or so million of notional. So obviously, we had EUR 700 million outstanding. So there'll be a little bit more to do for us to purchase there without going to that 10% limit.

And then obviously, you'd have to wait to do another -- a year to do another 10%. So that would be the structure right now, assuming there was no replacement of hybrid or issuance of equity, obviously.

[Rubinder Virdee, analyst]

Sure. Useful. And finally, I noticed the RCF obviously came from 500 to 400, and you've taken a -- the first time you've taken secured debt. Just wondering how is financing availability for the RCF? Was there the ability to do a 500 again?

[Bret McLeod, executive]

There was the ability to do a 500. I think as we -- the thing that's happened since we did the last facility, as you noticed, we've been selling assets. So right, as we sort of look to the right size for our portfolio, what's the RCF that we needed, 400 we thought was appropriate, given the portfolio. And frankly, given our continuing EUR 380 million of asset sales, we felt that was correct. And then we also wanted to -- I think, again, the divergence between the bond market obviously and the mortgage market is so extreme at this point, it really made a lot of sense for us to do a secured mortgage here. And obviously, I think the rate relative to our bonds proves that.

I think there is -- these times, I've experienced in my career. There are times when there's this dislocation and frankly, strong assets that we intend to hold forever are prime assets to put mortgages on. And that's what we did in this case.

[Operator]

[Operator Instructions] The next question comes from Neill Morgan from RBC BlueBay Asset Management.

[Neill Morgan, analyst]

Yes. Just following up on that sort of bond bank pricing, the extreme gap between the 2, and therefore, your comment that it makes sense to do mortgage on assets, great quality assets you intend to hold forever. Do you have -- in a way, that you have a target for disposals, do you have a target for an optimum or ideal level of mortgage finance that you'd like to raise? Or does that, in some way, depend on how the disposal program goes?

[Bret McLeod, executive]

It's a great question. I think it probably does depend a little bit on the disposal program. It also depends a bit on our -- obviously, our maturity profile. So as I noted, obviously, we've drawn a EUR 250 million term loan. We have some maturities in 2024 that we need to take care of and address with that. The remainder would come from asset sales. But to your question, we could certainly do more, if that was an option to repay that debt as well. So it is a lever we can pull.

And look, I think ultimately, we have some constraints under our bond covenants, where there are certain amounts that we could go up to. We wouldn't get close to that. But I think within a reasonable level, having some more mortgage debt at this time is something that we will continue to pursue.

[Neill Morgan, analyst]

And sorry, one follow-up. The obvious place to go for that be the existing group of lenders that you have and that you've -- that you signed this week's credit that we deal with.

[Bret McLeod, executive]

I think that would certainly be a starting point. I think, honestly, we'll likely be in the market with others in both probably Sweden and NOK. And frankly, taking local mortgage debt, as you know, is a natural hedge in both of those countries where we have some currency exposure. So I think it could be in Norway, it could be in Sweden as well that we would do additional mortgages on some of our assets and that would entail our current group.

But I think, again, there's a lot of capital that has been raised for secured debt funds. And so I think that capital is something we'll investigate and we'll certainly be looking to receive the most for the least for the longest and be appropriate for all of our shareholders to get the best deal we can.

[Operator]

The next question comes from Anssi Raussi from SEB.

[Anssi Raussi, analyst]

Just a quick follow-up and just to double check something here. So your fair value assessment is done in every quarter, of course. And you have said that Q1 and Q3, you mainly do it internally. But did you have some discussions with external parties here when you made these gains or...

[Bret McLeod, executive]

Correct. Every quarter, we go to our external appraisers and we ask for a letter on appropriate, on the markets and what's happening in the markets and then ask for a yield requirement that's published on our website. And then at the end of the year, we will do a full appraisal, full appraisal on all of our assets.

[F. Ball, executive]

So the only thing we're doing ourselves is updating our models for anything that's known at that point as it relates to rents. So it's...

[Bret McLeod, executive]

Exactly. The new leases signed in the quarter, that's updated.

[F. Ball, executive]

Yes. We're not making any assessment of cap rates. We're still relying on third parties for that.

[Anssi Raussi, analyst]

Okay. Great. Just wanted to double check that. So we don't have any major volatility here.

[F. Ball, executive]

Yes. Yes.

[Bret McLeod, executive]

Thanks.

[Operator]

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

[F. Ball, executive]

I would just like to say thank you for the great questions today. We appreciate it. And just as noted, we're very pleased with the operational results. The currency thing was the challenge we faced this quarter, but the underlying business is exceptionally strong, and we feel really good about it.

But again, thank you for your time and all your questions.